Don't Mess With Taxes

At a Senate hearing this morning (previewed here), a convicted felon said that using stolen identities to apply for tax refunds was "an easy way to make money quickly."

With a sport coat partially hiding his orange prison jumpsuit and flanked by federal marshals, Evangelos Soukas told the Senate Finance Committee that he was a "criminal already on the run from the FBI" in 2000 when he came across an Internet ad for quick tax refunds.

He used his mother's W-2 form to fashion a legitimate-looking tax return, applied for a refund anticipation loan through a tax preparer and got a $3,614 refund within days. Before he was caught, Soukas defrauded the government, banks and individuals of $1.1 million. He's serving an eight-year prison term.

In other testimony, a deputy with the Treasury Inspector General for Tax Administration said identity theft was involved in about 18 percent of the 45,000 fraudulent claims identified by the IRS in 2006. The cost of those cons: $232 million in bogus refunds.

You can read more about the hearing here, which also included what was described as a heated exchange between  Finance Committee Chairman Max Baucus (D-Mont.) and IRS Commissioner Mark Everson on the agency's security measures.